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ACV Auctions (ACVA)
NYSE:ACVA
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ACV Auctions
(NYSE:ACVA)
Rating:68Neutral
Price Target:
$17.50
▲(6.58%Upside)
Positive Factors
Market Share
ACV had another strong quarter of market share gains, which is expected to continue throughout 2025.
Operational Efficiency
EBITDA at $13.9mn beat Street at $10.4mn, showing strong operational efficiency.
Revenue Growth
ACV is expected to sustain 20% revenue growth for over three years, indicating strong business performance.
Negative Factors
Macro Risks
Potential macro shocks and competition from incumbent providers pose risks to ACV's performance.
Market Conditions
Revenue of $183 million increased 25% YOY and was at the midpoint of guidance despite exceptionally soft market conditions in February.
ACV Auctions (ACVA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.80B
Dividend YieldN/A
Average Volume (3M)1.76M
Price to Earnings (P/E)―
Beta (1Y)1.45
Revenue Growth32.89%
EPS Growth7.44%
CountryUS
Employees2,900
SectorConsumer Cyclical
Sector Strength73
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)0.04
Shares Outstanding171,064,790
10 Day Avg. Volume1,456,991
30 Day Avg. Volume1,763,309
Financial Highlights & Ratios
PEG Ratio6.43
Price to Book (P/B)4.96
Price to Sales (P/S)0.00
P/FCF Ratio41.25
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.28Price Target Upside29.60% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
ACV Auctions Business Overview & Revenue Model
Company DescriptionACV Auctions Inc. operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. It also provides data services that offer insights into the condition and value of used vehicles, as well as offers customer financing services. ACV Auctions Inc. was incorporated in 2014 and is headquartered in Buffalo, New York.
How the Company Makes MoneyACV Auctions makes money primarily through transaction fees collected from the vehicles sold on its platform. The company charges sellers a fee based on the final sale price of each vehicle transacted through its online auctions. Additionally, ACV Auctions generates revenue through various ancillary services, such as vehicle transportation and financing solutions, which are offered to further facilitate the buying and selling process for dealers. Key partnerships with auto dealerships and financial institutions also play a significant role in enhancing the company's service offerings and expanding its market reach.
ACV Auctions Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 4.52%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
ACV reported strong financial performance and growth, particularly in revenue and transport sectors, along with enhanced AI-driven innovations. Despite facing soft market conditions in February and potential challenges from tariffs, the company maintained robust growth and exceeded EBITDA expectations. The overall sentiment of the call is positive, reflecting confidence in future growth and market position.Q1-2025 Updates
Positive Updates
Record Revenue and Growth
Q1 revenue was $183 million, representing a 25% year-over-year growth. The company sold 208,000 vehicles, marking a 19% increase year-over-year.
Strong Performance in Transport and Capital
ACV Transport and ACV Capital delivered record performance with over 30% revenue growth in Q1. Revenue margin for ACV Transport expanded 460 basis points year-over-year.
Innovation and AI Integration
Significant advancements in AI integration across products and services, including AI-enabled pricing guidance and self-inspection tools, positioning the company for future growth.
Improved EBITDA and Cash Flow
Adjusted EBITDA of $14 million exceeded the high end of guidance, with a 500 basis points improvement in margin year-over-year. Operating cash flow in Q1 equaled the entire operating cash flow of the previous year.
Negative Updates
Soft Market Conditions in February
Despite achieving revenue targets, the company faced very soft market conditions in February, impacting unit growth.
Potential Challenges from Tariffs
Concerns were raised about the potential impact of tariffs on wholesale prices and dealer behavior, though the company reported minimal immediate pushback from customers.
Company Guidance
During the ACV Q1 2025 earnings call, the company provided guidance for the second quarter and full fiscal year. For Q2, revenue is expected to be between $193 million and $198 million, representing a growth of 20% to 23% year-over-year. Adjusted EBITDA is projected to range from $18 million to $20 million, reflecting a 170% increase year-over-year. For the full fiscal year, ACV reiterated its guidance with an anticipated revenue range of $765 million to $785 million, and adjusted EBITDA projected between $65 million and $75 million, indicating a 150% growth at the midpoint. The company expects dealer wholesale volumes to remain approximately flat year-over-year in 2025, with conversion rates and wholesale price depreciation following normal seasonal patterns. ACV also plans for revenue growth to exceed non-GAAP operating expense growth, excluding certain costs, by approximately 500 basis points.ACV Auctions Financial Statement Overview
Summary
ACV Auctions exhibits strong revenue growth and robust cash flow generation, with significant improvements in free cash flow. However, challenges remain in achieving profitability, as evidenced by negative EBIT and net profit margins, despite a strong balance sheet with low leverage.Income Statement
ACV Auctions has demonstrated a strong revenue growth trajectory, with a notable increase of 32.41% from 2023 to 2024. The gross profit margin for 2024 is significant at 61.05%, indicating effective cost management. However, the company continues to report a negative EBIT margin of -13.20% and a net profit margin of -12.51%, reflecting ongoing challenges in achieving profitability.72
Positive
Balance Sheet
The balance sheet shows a strong equity position with an equity ratio of 44.71%, pointing to a solid financial foundation. The debt-to-equity ratio is manageable at 0.28, indicating low leverage risk. However, the negative net income results in a negative ROE, highlighting the need for improved profitability to enhance shareholder returns.65
Positive
Cash Flow
ACV Auctions' cash flow position has improved significantly, with a positive operating cash flow of $65.4 million and a free cash flow of $60.9 million in 2024. The free cash flow to net income ratio is robust, indicating strong cash generation relative to net losses. The company has also shown a remarkable turnaround in free cash flow growth, moving from negative to positive territory year-over-year.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 637.16M | 481.23M | 421.53M | 358.44M | 208.36M | Gross Profit |
| 388.95M | 236.78M | 184.88M | 153.68M | 95.31M | EBIT |
| -84.11M | -89.68M | -106.21M | -76.81M | -40.65M | EBITDA |
| -46.57M | -53.88M | -89.75M | -67.92M | -32.65M | Net Income Common Stockholders |
| -79.70M | -75.26M | -102.19M | -78.18M | -41.02M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 270.10M | 411.33M | 496.68M | 579.76M | 233.72M | Total Assets |
| 984.15M | 922.92M | 914.92M | 982.96M | 404.55M | Total Debt |
| 123.00M | 115.00M | 76.67M | 3.85M | 6.90M | Net Debt |
| -101.06M | -66.87M | -204.08M | -562.14M | -226.82M | Total Liabilities |
| 544.14M | 466.40M | 429.20M | 426.86M | 544.24M | Stockholders Equity |
| 440.00M | 456.53M | 485.72M | 556.10M | -139.69M |
| Cash Flow | Free Cash Flow | |||
| 60.86M | -46.05M | -97.66M | 71.26M | 1.48M | Operating Cash Flow |
| 65.40M | -17.89M | -74.26M | 85.29M | 10.37M | Investing Cash Flow |
| -15.86M | -110.97M | -283.89M | -129.27M | -19.67M | Financing Cash Flow |
| -7.87M | 30.63M | 72.93M | 376.25M | 60.76M |
ACV Auctions Technical Analysis
Neutral
16.42
Price Trends
15.33
Positive
16.93
Negative
18.47
Negative
Market Momentum
0.26
Positive
54.12
Neutral
33.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACVA, the sentiment is Neutral. The current price of 16.42 is below the 20-day moving average (MA) of 16.59, above the 50-day MA of 15.33, and below the 200-day MA of 18.47, indicating a neutral trend. The MACD of 0.26 indicates Positive momentum. The RSI at 54.12 is Neutral, neither overbought nor oversold. The STOCH value of 33.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ACVA.
ACV Auctions Risk Analysis
ACV Auctions disclosed 53 risk factors in its most recent earnings report. ACV Auctions reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
We may require additional debt and equity capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances. If such capital is not available to us, our business may be harmed. Q4, 2024
2.
Our business is subject to the risk of natural disasters, adverse weather events, global pandemics, and other catastrophic events, and to interruption by man-made problems such as geopolitical tensions, armed conflicts and acts of terrorism. Q4, 2024
ACV Auctions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $651.51M | 15.50 | 9.35% | ― | 2.24% | -57.33% | |
73 Outperform | $4.59B | 10.88 | 11.92% | ― | 11.11% | -23.41% | |
71 Outperform | $2.53B | 40.68 | 5.46% | ― | 9.42% | ― | |
68 Neutral | $2.80B | ― | -16.49% | ― | 32.89% | 7.44% | |
67 Neutral | $511.65M | 6.63 | 0.12% | ― | 40.31% | -204.86% | |
62 Neutral | $6.93B | 11.25 | 2.95% | 3.88% | 2.69% | -24.71% | |
40 Underperform | $743.11M | ― | 260.24% | ― | 9.33% | 50.69% |
* Consumer Cyclical Sector Average
Performance Comparison
ACVA
ACV Auctions
16.42
-1.25
-7.07%
ABG
Asbury
228.73
-6.70
-2.85%
KAR
OPENLANE
23.73
6.58
38.37%
CARS
Cars
10.42
-10.05
-49.10%
UXIN
Uxin
3.91
1.61
70.00%
CANG
Cango
5.24
3.54
208.24%
ACV Auctions Corporate Events
Executive/Board ChangesShareholder Meetings
ACV Auctions Holds Annual Stockholders Meeting on Key Proposals
Neutral
Jun 3, 2025
On May 28, 2025, ACV Auctions Inc. held its Annual Meeting of Stockholders, where five key proposals were voted on. These included the election of directors, approval of officer exculpation, share reclassification, executive compensation, and the ratification of Ernst and Young LLP as the independent registered public accounting firm for 2025. The outcomes of these votes are expected to impact the company’s governance structure and financial operations, with changes such as the reclassification of stock potentially affecting shareholder value.
The most recent analyst rating on (ACVA) stock is a Buy with a $23.00 price target. To see the full list of analyst forecasts on ACV Auctions stock, see the ACVA Stock Forecast page.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.